Published on : 26 Sep 2025, 6:40 am 7 min read

The Supreme Court on Thursday ruled that a cash loan above ₹20,000 does not become an unenforceable debt under Section 138 of the Negotiable Instruments Act (NI Act) only because it breaches Section 269SS of the Income Tax (IT) Act that bars any person from accepting loans or deposits of ₹20,000 or more in cash [Sanjabij Tari v Kishore S Borcar & Anr]

The bench of Justice Manmohan and Justice NV Anjaria set aside a recent Kerala High Court view that such a debt was not legally enforceable since it was in violation of Section 269SS of the IT Act.

The top court opined that such a breach only invites a penalty under Section 271D of the IT Act and cannot defeat prosecution under Section 138 of the NI Act.

" This Court is of the

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